Vietnam thought it had a deal on its US tariff rate. Then Trump stepped in.
Trump is impatient with the pace of the trade deals, indicating that he would prefer to send letters to countries setting the tariff rates on their goods, rather than what he now acknowledges is the arduous process of negotiating comprehensive trade deals with countries around the world.
'I just want you to know a letter means a deal,' Trump said at the White House on Tuesday. 'We can't meet with 200 countries.'
Vietnam has watched as Trump this week proposed new tariff rates on other Asian countries — including an identical 20 percent rate on the Philippines — to go into effect on Aug. 1, without any of the concessions or rules about where goods originate that Vietnam is prepared to agree to.
Hanoi has said little publicly about the tariff rates since Trump announced them on social media. A Vietnamese state media report on the deal published July 2 didn't mention any agreed-to duties. Instead, the report said that Trump's call with Lâm had resulted in a 'Joint Statement on a fair, balanced reciprocal trade agreement.' That joint statement has yet to be released.
That may reflect Hanoi's frustration at Trump's move to derail the original agreement. A copy of a draft joint statement of the deal's terms obtained by POLITICO the same day Trump announced the deal outlined more favorable trading conditions for Vietnam, including a 'substantial reduction' in the U.S. tariffs on Vietnam's imports.
Regional experts worry the episode could undermine decades of effort to rebuild diplomatic ties after the Vietnam War, not to mention a surging commercial relationship. According to the International Trade Administration, trade between the two countries has ballooned since Washington and Hanoi signed a bilateral trade agreement in 2001 — from $2.9 billion in 2002 to over $139 billion in 2022 — transforming Vietnam into the sixth-largest source of U.S. imports.
'Certainly their trust in the U.S. as a reliable partner, which has been built over the last 30 years, will take a big hit,' said Scot Marciel, a former deputy assistant secretary of State for East Asia and the Pacific, who led the U.S. Embassy's political and economic section in Hanoi from 1993 to 1996. 'Purely in terms of U.S.-versus-Chinese influence, China will benefit from this.'
Other countries are also aware of the last-minute change to the agreed tariff rates and have discussed it with each other, according to one of the people cited above as well as an Asian diplomat, highlighting the uncertainty U.S. trading partners feel as they continue negotiations with a president who seems to alter his tariff threats at whim.
'To have the president do that basically pulls the rug out from the credibility of the negotiators, and other countries are watching this stuff,' said Harry Broadman, a former assistant U.S. trade representative in the George H.W. Bush and Bill Clinton administrations. 'If you're going to the negotiating table with country X, and they just saw country Y did a deal but then it was undercut, they'll say, 'Why am I spending time with you? And how do I know that what we agree here is going to be ultimately what the final deal is?''
Doug Palmer contributed to this report.
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